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Nov / 7

Brexit, IR35 and Contractor Rates: Contractors Speak

We recently surveyed hundreds of contractors to get your views on all aspects of contracting life – from Brexit and IR35, to rates and how you search for roles – and we discovered some interesting results.

Overall, contractors seem fairly relaxed about the impact that Brexit will have on their work prospects; 37 per cent don’t think Brexit will make any difference to them. Just over a quarter (26 per cent) think that leaving the EU will make it more difficult to get work, but 11 per cent think Brexit will make it easier to get contract work. Rather unsurprisingly, given the mixed messages coming from the jobs market, over a quarter (26 per cent) don’t know what effect Brexit will have.

Many contractors are feeling positive enough to say that they’ll be putting up the rates they charge in the next 12 months, with 44 per cent planning to increase them. A slightly bigger proportion (48 per cent) plan on leaving their rates unchanged, but seven per cent are planning to reduce them. With a think tank predicting that inflation will quadruple to about four per cent in the second half of 2017, contractors are likely to see an impact on how far their money goes.

One thing the majority of contractors agree on is that they lack support from the government. Sixty per cent of contractors think the government is discouraging people from contracting and would rather they become permanent employees. Just eight per cent think that the government values contractors.

A big contributor to this thinking is likely to be the proposed changes to IR35 in the public sector. We expect to hear more about these in the Autumn Statement, which is due on the 23rd of November. The changes would make the engager – which might be a recruitment company – responsible for ensuring the right amount of tax has been paid. With our research showing that recruiters are the most popular means by which contractors find new roles, placing additional burdens on them does little to help the contracting market. We’ll be keeping a close eye on this for all our contracting community.

If you’re confused about IR35 and what your status may be in a new contract, please contact Contracting Scout for advice – we know the contractor market inside out.